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Can green bond issuance promote enterprise green technological innovation?

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  • Ren, Penghan
  • Cheng, Zhonghua
  • Dai, Qingling

Abstract

Green innovation is encouraged and green development is made possible with the help of green financial support. Green bonds, an essential component of green finance, are crucial for assisting businesses in pursuing green technological innovation (GTI). The 4107 businesses listed on the Shanghai and Shenzhen Stock Exchanges provided the research data for this article. This paper uses the propensity score matching and multi-time point Difference-in-Differences (PSM-DID) method to empirically investigate both the impact of green bond issuance on enterprise GTI and how it does so; in other words, its mechanism. According to statistics, green bond issuance can greatly increase enterprise GTI, and the outcome holds up to a number of robustness tests. In addition, heterogeneity analysis reveals that this promotion effect is more significant in large-scale, non-state-owned, and low-polluting businesses. Furthermore, mechanism tests show that green bond issuance can promote enterprise GTI through a financing restraint function, an investment incentive function and a green regulation function.

Suggested Citation

  • Ren, Penghan & Cheng, Zhonghua & Dai, Qingling, 2024. "Can green bond issuance promote enterprise green technological innovation?," The North American Journal of Economics and Finance, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:ecofin:v:69:y:2024:i:pa:s1062940823001444
    DOI: 10.1016/j.najef.2023.102021
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    3. Rongnan Li & Zhongfei Li & Kexin Hu & Kai Gan, 2024. "The spillover effects of green bond issuance: a study based on Chinese firms’ stock price synchronicity," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-41, February.
    4. Rongnan Li & Zhuang Liu & Kai Gan, 2024. "Impact of cities’ issuance of green bonds on local firm performance: evidence from China," Operational Research, Springer, vol. 24(3), pages 1-30, September.
    5. Hong, Jifeng & Kazakis, Pantelis & Strieborny, Martin, 2024. "Green Bond Issuance by Firms, External Monitoring, and Probability of Default: An Empirical Research Based on Green Policies," MPRA Paper 123049, University Library of Munich, Germany.
    6. He, Ling & Dai, Peng-Fei & Hu, Shiyang & Gan, Shengdao, 2024. "Do green bond issuers walk the talk? Exploring the alignment between green bond issuance and subsequent green investment," International Review of Economics & Finance, Elsevier, vol. 94(C).

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    More about this item

    Keywords

    Green bond issuance; Green technological innovation; PSM-DID; Financing constraint;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O00 - Economic Development, Innovation, Technological Change, and Growth - - General - - - General

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